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Home of the Future

  • November 2015
  • -
  • Frost & Sullivan
  • -
  • 106 pages

European Consumer Demands for a Connected Lifestyle and Expectations for their Ecosystem

The smart and connected homes market is in a high growth phase at the moment, but it is also riddled with uncertainty about what will happen next in terms of technology, applications, business models, suppliers, and customer demographics. This study takes a detailed look at the expectation and requirements of end customers in Europe by examining attitudes and opinions towards all of the key elements of connected living. The analysis is based on interviews with 2,000 residential customers across Europe's 5 largest markets: Germany, France, the United Kingdom, Italy, and Spain.

Top Findings
An Overview of the Survey Results

Cost is King: Despite the numerous benefits that smart home solutions can deliver, cost is at the heart of the decision making process. Adoption inertia will be evident whereby providers are unable to either subsidise or spread the cost of investment. On the flipside, consumers will invest in solutions that can provide tangible benefits—whether these savings relate to reduced energy consumption or improved levels of security.

Focused Opportunities Evident in Core Demographics: Italian and Spanish respondents show the strongest interest in smart home solutions. Unfortunately, consumers in these markets are also the most price sensitive—business models and price expectations must bear this in mind. Younger survey respondents are generally more interested in connected living, but, again, the spending power of this demographic is in some cases lower than their elder counterparts.

Functional Priorities are Changing: Security (including surveillance and home monitoring) currently has the highest penetration among existing users of smart home solutions, followed closely by connected home entertainment. However, customers attach the highest benefits to home heating and cooling management, suggesting a strong future growth outlook for smart energy control solutions.

Mobile Control: Smartphones are the favoured control method for connected home solutions; around % of respondents would opt for this interface, while dedicated remote control devices were less popular. In an app dominated world, this is perhaps unsurprising. Wearable devices are already creeping into consumer consciousness—almost % state a preference for this control method, despite the current penetration of such devices being far lower.

Visibility is Everything: Today, energy/utility providers are seen as the leading innovators for connected home solutions by nearly % of respondents. This is almost certainly due to their marketing activities and the dominance of highly valued solutions in areas such as energy management. By partnering with innovative vendors such as Nest and Hive, energy firms are developing a position of ‘innovation through association’.

Top Conclusions
What Can We Infer from the Results?

Connectivity-related Issues Must be Resolved: High-speed and reliable connectivity is the foundation for all smart/connected home services. Both the speed of connection into the home and the ability to access high-speed services throughout the home are essential. The survey results show that a significant proportion of respondents still have issues in both regards.

Consumer Aspirations will Change: Today, consumers show greatest interest in ‘traditional’ solutions including entertainment and security. But most benefit is seen in areas such as energy management, where cost drivers will come to prevalence. Companies targeting smart home opportunities should focus on the next wave of investment, in which the mainstream consumer will start to drive adoption.

A Push Rather than Pull Opportunity: Emphasis is currently on suppliers to innovate in order to drive market adoption; consumers are influenced by what they can see today rather than what might be available/possible in the future. Visibility is essential. Although energy providers are well positioned today, they are unlikely to be top innovators in the future smart home market. However, this early success does underline the value of developing vendor/channel partnerships to bring innovative technology to the masses.

Business Models are Yet to be Defined: There is no clear business model of choice in the smart home market, with subscription and monthly payment models sharing equal appeal. In addition, a considerable proportion of consumers is unwilling to pay for smart home solutions, which will limit market adoption. There are, however, positive signs. For example, over half of respondents would consider receiving advertising to reduce the costs of solutions. This is an evolving area, but innovation is essential to attract mainstream attention.

Table Of Contents

Home of the Future
1. EXECUTIVE SUMMARY

Executive Summary
Top Findings
Top Conclusions
Top Recommendations
Opportunity Evolution
Associated Research and Multimedia

2. MARKET CONTEXT

Market Context
Defining the Ecosystem of a Connected Home
The Home of the Future is at the Heart of Connected Living
Connected Living Market Potential
Vision of a Connected Home
Connected Home—Current State of Play
Connected Home—Development Roadmap

3. RESEARCH OBJECTIVES AND METHODS

Research Objectives and Methods
Objective
Methodology
Sample Characteristics—Demographics
Sample Characteristics—Living Situation

4. RESPONDENT PROFILES

Respondent Profiles
Demographics—Living Situation
Demographics—Employment Status
Internet Usage Patterns
Attitudes towards New Technologies

5. TECHNICAL INFRASTRUCTURE OF HOME

Technical Infrastructure of Home
Technical Infrastructure—France
Technical Infrastructure—Germany
Technical Infrastructure—Italy
Technical Infrastructure—Spain
Technical Infrastructure—UK
Issues Faced with Current Home Connectivity
Types of Data Network at Home
Cloud Services
Installed Control or Automation Applications at Home
Installed Control or Automation Applications at Home by Country
Installed Control or Automation Applications at Home by Age

6. GENERAL PERCEPTIONS OF SMART HOME SOLUTIONS

General Perceptions of Smart Home Solutions
Consumers are Aware of the Concept of Smart Homes
Perception of Smart Homes
Most Beneficial Areas for Smart Home Solutions
Most Beneficial Areas for Smart Home Solutions by Country
Most Beneficial Areas for Smart Home Solutions by Age
Overall Perceived Benefits of Smart Home Solutions
Overall Perceived Benefits of Smart Home Solutions by Country
Overall Perceived Benefits of Smart Home Solutions by Age Group
Main Obstacles against Smart Home Solutions
Major Concerns against Smart Home Solutions by Country
Major Concerns against Smart Home Solutions by Age
Preferred Way to Control Smart Devices
Perception of Future Usage of Smart Home Solutions
Acceptance of Advertisements to Reduce Costs
Most Innovative Companies to Provide Smart Solutions

7. ENERGY, LIGHTING, AND HEATING MANAGEMENT

Energy, Lighting, and Heating Management
Most Benefits of Energy Management Solutions
Most Benefits of Energy Management Solutions by Age
Most Benefits of Energy Management Solutions by Country
Preferred Way of Home Installation
Most Trusted Type of Companies
Preferred Payment Models

8. SECURITY AND HOME SURVEILLANCE

Security and Home Surveillance
Perceived Benefits of Smart Monitoring Solutions
Perceived Benefits of Smart Monitoring Solutions by Country
Preferred Way of Home Installation
Most Trusted Type of Companies
Preferred Payment Models

9. HOME ENTERTAINMENT

Home Entertainment
Perceived Benefits of Home Entertainment
Perceived Benefits of Home Entertainment by Age
Perceived Benefits of Home Entertainment by Country
Most Trusted Type of Companies
Preferred Payment Models
Obstacles against More Multi-media Usage

10. HOME HEALTH AND HOME CARE SOLUTIONS

Home Health and Home Care Solutions
General Interest in Connected Health Solutions
Perceived Benefits of Connected Health and Care Solutions
Benefits of Connected Health and Care Solutions by Age
Benefits of Connected Health and Care Solutions by Country
Preferred Ways to Control Connected Health and Care Solutions

11. HOME CONTROL

Home Control
Perceived Benefits of Home Control
Perceived Benefits of Home Control by Age
Perceived Benefits of Home Control by Country

12. CUSTOMER PROFILE—FAMILIES WITH CHILDREN

Customer Profile—Families with Children
Internet Usage and Home Appliances—Parents
Measures to Control Children‘s Internet Usage
Perceived Benefits of Smart Home Solutions by Type of Family

13. CUSTOMER PROFILE—FROM EARLY ADOPTER TO STANDARD SEEKER

Customer Profile—From Early Adopter to Standard Seeker
Home Devices and Control Applications
Cloud Services in Use
Home Connectivity
Perceived Benefits of Smart Home Solutions
Legal Disclaimer

14. THE FROST and SULLIVAN STORY

The Frost and Sullivan Story
Value Proposition—Future of Your Company and Career
Global Perspective
Industry Convergence
360º Research Perspective
Implementation Excellence
Our Blue Ocean Strategy

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